Print - About Face: Microsoft Sends Feelers to Facebook

With the Yahoo! debacle behind it, Microsoft has turned, as expected, to smaller social networking sites for possible acquisition. First up, according to a report today in "The Wall Street Journal" is Facebook.

Though neither company will comment on any potential deal, Microsoft's investment bankers have reportedly contacted Facebook to see if the company is interested in a sale. That said, there are no active discussions between the two companies, so it's unclear whether anything is in the works. What is clear, however, is that Microsoft has made inquiries.

Microsoft already owns 1.6 percent of Facebook, thanks to a $240 million investment last year, which valued the social networking site at $15 billion. Few believe Facebook is worth anywhere near that, however. The site currently has about 109 million unique visitors a month, making it the fifth most-visited Web property after Google (625 million), Microsoft (563 million), Yahoo! (505 million), and MySpace (117 million).

While Facebook's numbers are up dramatically year over year, the company has faltered in its bid to monetize its popularity. Facebook makes very little via advertising, and half of its revenues from 2007 were derived directly from Microsoft's investment.

In a related note, Yahoo! has also moved on since the aborted merger with Microsoft. The company is allegedly still talking with Time Warner about a potential merger of Yahoo! and AOL. And Yahoo! is still considering outsourcing part of its Internet search operation to Google.

Perfect timing, Microsoft. Just when everyone is losing interest in Facebook ( http://tinyurl.com/47jw55 ). Why don't you buy Vox while you're at it? Come on...you're better than this. Do something amazing and inspiring with all that money and talent.

@Lotsa: Way to go. I highly doubt that "everyone" is losing interest in Facebook. The webpage you mentioned was only referring to developers, after all. I mean, come on. This had to happen sooner or later -- there are so many useless apps on Facebook that it's a wonder that more can still be made. I'm not sorry to see that it's becoming less appealing to developers. And, along with all the non-developer Facebook users (who are the majority, Lotsa, in case you didn't realize), I'll be happy to keep using it for social purposes until something better comes along. So far, nothing has. Say what you will about Facebook, but it sure beats MySpace.

Facebook could use a major overhaul. Perhaps with MS behind it, it could get it. But its undenyable that MySpace would make a much better acquisition. I would be gunning for that if I was incharge and not Ballmer.

"Say what you will about Facebook, but it sure beats MySpace." Well if you want to set the bar that low, OK. I'll agree with you. It's like winning a beauty contest as the "best-dressed woman in Latvia".

"It's like winning a beauty contest as the "best-dressed woman in Latvia"." you must have really bad taste then. http://en.wikipedia.org/wiki/Inguna_Butane ....10 seconds of research.... XP

People could be "losing interest' in Facebook, just like they lost interest in MySpace a couple years ago. Or they could be like me, and wisely never had any interest in either of them to begin with.

@Patriot - "Or they could be like me, and wisely never had any interest in either of them to begin with." Bravo!!! I couldn't agree more!!! --tayme

Wae: I should also point out that I said "best-dressed", and that outfit she has on is, well, hideous.

"I should also point out that I said "best-dressed"" backpeddle all you want - she is still hot regardless of what she wears. XP

All of the social networking sites have a purpose to diverisfy your presence. It's like placing an add in 3 newspapers instead of one. There is something better than both Facebook and MySpace it combines YouTube, Facebook, MySpace plus has web based IM (no client installs) and web based group chat with audio and video, you can sell on there for free and full web spaces without the site brand, I would say that beats them all !! GigBreak is the place to go for everything social networking has to offer and more, but it's only been out for a month. But the site kicks butt.